OP’s price jumped 22% and was followed by a number one spot in social interaction. Traders opened multiple long positions despite the slight circulation.
According to LunarCrush, Optimism [OP] ranked as the highest asset with the most social activity, as the market pushed towards bullish dominance.
It is worth mentioning that Optimism speeds up Ethereum transactions, and reduces their costs by settling them on another Blockchain using advanced data compression techniques.
The native layer two (L2) protocol token had previously experienced the red side of the decentralized money market. This led to a seven-day drop of 6.31%.
Now, its position on the social intelligence platform means that insights from millions of conversations put Optimism in a positive light. As a result, OP became one of the best performing cryptocurrencies in the last 24 hours. Currently, the token is up 22.02%.
OP Bulls Are in Pole Position
An assessment of the derivatives market showed that traders were taking advantage of the rally. First, data from Coinglass revealed that futures open interest (OI) was unusually high on almost all exchanges.
The OI represents the number of futures contracts held by market participants during a trading day. With double-digit increases in this regard, it means that traders were solidly behind the OP price action.
The settlement data showed further evidence of merchant interest in the token. This was because OP barely recorded millions of dollar liquidations in the last few weeks. However, the market decline closed at $4.73 million on March 12. As expected, the shorts experienced the most.
Meanwhile, the OP net realized profit and loss fell to -1.55 million on March 11. However, the jump in price seemed to have helped with the recovery. The metric was 4480. The metric calculates the average gain or loss of an asset within a daily time period. Thus, OP spike holders, on average, had made substantial profits, and investor capitulation was not a close option.
Taking Short-Term Profits from Glory May be…
In addition, the increase in OP’s price resulted in an increase in its Z-score from market value to realized value (MVRV). The MVRV Z score is used to assess whether an asset is undervalued or overvalued. This metric also considers the difference between market capitalization and realized capitalization.
According to Santiment, the MVRV Z score was -21,066 at press time. Compared to the position between January and February, this status placed OP as undervalued.
However, as the market has been largely shaky of late, investors may want to tread cautiously. Lastly, OP’s one-day circulation dropped to 4.21 million, implying that the number of tokens traded did not trade a large number of wallets.
By Audy Castaneda
